24 Charged in Alleged Massive Medicare Fraud

In what was called one of the largest health care fraud schemes in U.S. history, federal officials on Tuesday announced a crackdown against 24 people charged in cases involving more than $1.2 billion in Medicare losses.

Separately, the Centers for Medicare and Medicaid Services announced the suspension of payments to 130 sellers of durable medical equipment that submitted more than $1.7 billion in claims and were paid more than $900 million.

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The alleged crime schemes centered on hundreds of thousands of Medicare recipients who were lured by overseas telemarketers into obtaining free or low-cost braces for their backs, shoulders, wrists and knees.

More than 59 million people are enrolled in Medicare, the federal health insurance program for people age 65 and older and people with disabilities.

The defendants, from across the U.S., include three medical professionals, officials from five telemedicine companies and the owners of dozens of durable medical equipment companies. The scheme involved paying doctors to prescribe the medical braces with little or no interaction — sometimes only a brief phone call — with patients.

Proceeds bankrolled exotic cars and yachts

Some of the defendants’ illegal proceeds bankrolled the purchase of exotic cars, yachts and luxury real estate in the U.S. and abroad, authorities said.

"The breadth of this nationwide conspiracy should be frightening to all who rely on some form of health care,” said Don Fort, chief of the criminal investigation arm of the Internal Revenue Service.

"The conspiracy … was not perpetrated by one individual,” Fort said. “Rather, it details broad corruption, massive amounts of greed and systemic flaws in our health care system that were exploited by the defendants."

The federal charges were filed in six states: California, Florida, New Jersey, Pennsylvania, South Carolina and Texas.

The 24 defendants caught in what one prosecutor called Operation Brace Yourself included three licensed medical professionals, the owners of dozens of firms selling durable medical equipment, and top executives at five telemedicine companies, officials said.